Jim Fitzpatrick: The Secretary of State commissioned PricewaterhouseCoopers to conduct an examination of the finances of Tower Hamlets council. Tower Hamlets council will be paying for that audit. Will the Secretary of State update us on how long it will be before the auditors report?

Eric Pickles: We are talking in terms of a matter of days. I understand that the consultants have finished their report, but the facts will have to be checked with Tower Hamlets, and only when that process has been completed will I be briefed on it. I shall then have to make a “minded” statement, because Tower Hamlets will obviously have the right to respond before I make a final statement to the House.

Actually, Eric “misspoke” slightly when he said a “matter of days”.

The Department for Communities and Local Government has just issued a statement detailing the next steps.

As the council’s head of paid service, Steve Halsey, announced to staff this week, PwC’s team of up to 25 inspectors have now “withdrawn” from the town hall.

Their fieldwork was completed on September 8. They are now into the fact-checking phase. This means extracts of the facts contained in PwC’s draft report are being sent to interviewees (ie Mayor Lutfur Rahman and officers etc) for fact-checking.

It is expected this process will take 10 working days. Responses and comments will have to be returned to PwC by September 25.

The report might then have to be amended; while this phase has in theory no time limits, it’s unlikely to take more than two weeks. The report will then be sent to both Eric Pickles and the council.

Pickles will then consider what action, if any, he will take. He’ll probably make his decision within 24 hours before issuing a statement to the Commons. The PwC report will also be published at that point.

It is expected this statement and publication will take place in the week beginning October 13.

What actions might Eric take? Well, certain “direct functions” might be removed from the council and instead placed under the direct control of the Secretary of State, or independent commissioners appointed by him.

In other words, special measures. This might well be the grants or procurement processes, for example…but that’s purely my speculation.

Many in Tower Hamlets, including within Lutfur’s camp, believe Eric will at least impose a new council chief executive and relieve the clearly overworked Stephen Halsey from his head of paid services duties.

Camp Lutfur, and some senior Labour figures, also doubt whether the PwC report will, beyond installing a new chief executive role, contain anything more than a few rapped knuckles over processes.

This language tends to downplay the importance of following “processes” in local government spending decisions…

Jim Fitzpatrick and Lutfur’s team are also openly worried and critical of the potential £1million cost of the PwC report. As things currently stand, those costs will be charged directly to Tower Hamlets taxpayers.

It is inconceivable this will happen in reality. If the report finds governance failures, it will surely be sensible politically for Eric to announce that Whitehall will pick up the tab: why should innocent Tower Hamlets taxpayers face the double-whammy of suffering poor governance AND the cost of detecting them?

Meanwhile, Lutfur seems to be carrying on oblivious. Over last few weeks he’s been concerned with the important matter of choosing his next chauffeured car.

Nine days ago, this Volvo V60 Estate D6 AWD Plug-in Hybrid 5dr (Price £49,975) was seen in his town hall parking spot.

A Toyota Prius hybrid (as I predicted here in May) has also been seen in that space.

A council spokesman said:

We are currently exploring a range of transport options to assist the Mayor in his duties. As part of this process the more efficient and environmentally-friendly hybrid cars are being considered as a potential option.

A car is necessary because the Mayor seeks to maximise his accessibility to the electorate by going to them rather than requiring them to come to the Town Hall.

Most recently the Mayor trialled a more environmentally-friendly Volvo hybrid D6 for three days, at zero cost to the taxpayer.

But when I asked what other cars he’d tried out, Takki Sulaiman’s press office told me to submit a Freedom of Information request.

Which says something about attitudes towards openness and what they consider the “best value” for taxpayers’ money.

PS.. Sadly, I wasn’t at last night’s full council meeting, which didn’t fail to live down to its usual standards. Lutfur and his Tower Hamlets First party staged a walkout rather than debate why the council has spent money applying for a judicial review on DCLG’s decision to send in PwC. All councillors were apparently told by interim monitoring officer Meic Sullivan-Gould they risked jail should they breach the Contempt of Court Act in debating the issue.

In April inspectors from PricewaterhouseCoopers were asked to look into serious allegations of governance failure, poor financial management and fraud.

PwC have now substantially completed their inspection fieldwork and are in the process of producing their report.

PwC has today (Thursday 11 September) sent certain factual information, which they may include in their full report, to Tower Hamlets Council for fact-checking.

Where individuals have given information in interviews which may be referred to in the report, PwC will also be sending relevant information to that individual by the end of the week.

The council and individuals receiving this information will have 10 working days to comment to PwC on its factual accuracy.

All this information has been provided by PwC on a strictly confidential basis solely for the purpose of this fact-checking exercise.

From Thursday 25 September PwC will be considering all the comments received, and finalising their inspection report, which must include any matters identified where the council has not complied with its statutory best value duty.

As required by statute once PwC has finalised its full report, it will then send a copy of that report to the Secretary of State and to Tower Hamlets Council.

Once the Secretary of State has received the report, he will give it careful consideration. Subsequently, in due course, he intends to exercise his statutory power to publish the report, and to make any statement he considers appropriate to Parliament.

If the Secretary of State is satisfied that Tower Hamlets Council is failing to comply with its best value duty, he may exercise his powers of statutory intervention. Statutory intervention may take a number of forms including directing a council to take any action that the Secretary of State considers necessary or expedient to secure its compliance with the best value duty, or directing that certain parts of the council’s functions be undertaken by the Secretary of State or by a person – for example a commissioner – appointed by him for that purpose.

Like this:

29 Responses

Nice to see he’s got a shiny new car – especially when the council has just arbitrarily removed over 100 disabled residents dedicated parking bays from outside their homes throughout the borough. The man’s a disgrace.

“It is inconceivable this will happen in reality. If the report finds governance failures, it will surely be sensible politically for Eric to announce that Whitehall will pick up the tab: why should innocent Tower Hamlets taxpayers face the double-whammy of suffering poor governance AND the cost of detecting them?”

Simple.

Send in Commissioners with powers of life and death in the Town Hall. Have them sack Sulaiman and close down East End Life (as the law is meant to have done by now), sack that tub of lard who calls himself the Legal Officer but is in fact, as with the lamented Isabella, simply Lutfur’s bitch (He was busy shouting sit down! sit down! at Peter Golds in the council meeting you’ll have seen), and cancel all grants to mosques masquerading as community centres out of the Faith grant scheme.

That will save enough money in one year to pay for PWC’s audit, and enough left over for peacock and chips all round at Mulberry Place for the staff that remain.

Any staff who are replaced will simply be moved on in the travelling circus of parasites, to some other authority with a few of our pounds and a glowing reference and no thought for the damage they presided over.

I have no doubt that PWC are going to have found quite a bit to be of concern. A sensible report from them would prioritise the concerns by their severity and recommend action to tackle the most severe while acknowledging the weaker complaints.

However, I don’t think it’s helpful at this stage to speculate about what action they might recommend or that Pickles might take. It can only lead to disappointment and bitterness if their actual recommendations are not as strong as the speculation (even though their recommendations may be more effective).

By the way, the more I see of the Yes campaign in Scotland the more I think that they and Alex Salmond have been learning at the feet of the master in Tower Hamlets. Am I alone in that?

His attack on the BBC’s Nick Robinson yesterday (instead of answering the straightforward question) was straight out of the Tower Hamlets/Takki Suleiman toolkit of responses.

And yesterday night watching the debate with 16 year olds on the TV there was somebody from the yes campaign on the platform who, rather than dealing with the substance of a statement from George Galloway, instead pushed forward with a smear using Galloway’s expressed views on rape to ask whether the audience could trust him and anything he had to say. (I never thought I’d be standing up for Galloway but whatever the point was that he raised, it was a valid one.)

Do I get a prize for being the first to introduce a gratuitous link to the Yes campaign into this blog?

I’d be interested to know the detail of what of what powers Pickles has to sack a CE. I would imagine that he can do such under the powers he has (Doncaster?) but there is also the precedent whereby that idiot Balls told LB Haringey to sack Sharon Shoesmith – but without any power to get them to do such. That was a decision that cost all a lot when she (correctly) took Haringey to court for this action.

You ‘democrats’ should be careful what you wish for. You have spoken a lot about supposed electoral fixing by Lutfer. I have not been convinced but I would imagine few would not be sure that Lutfer has considerable support in TH. One of the good things about the borough is that Tories are generally seen as vermin but soon we may have an elected Mayor (or the officers he appoints) replaced by placeman of the Tory Secretary of State – but then there are not a few of you here who think democracy not a little overrated and would favour its replacement with something somewhat more Teutonic.

As a member of what you call the ‘vermin’ party and also somebody who is half-Teutonic I am not sure I like being described as an Untermensch. I would like to counter though by commenting on why having a Chief Executive imposed by an outside authority might actually be good for democracy in TH.

One of the fundamental problems in TH is a breakdown in trust between many residents and Council officers and their actions. As a new Councillor I have been shocked by the unwillingness or inability of Council officers to engage with residents & I on issues and the general lack of transparency. A lack of transparency that comes from the very top.

I will give you one example. The South Quay Masterplan consultation was advertised by putting a small non-descript advert on page 34 of East End Life (during the August bank holiday week) advertising two public drop in sessions because the Council said they wanted to actively engage the public. 87 minutes before the first meeting a new page was created on the TH Council website that you could only find by searching for the term South Quay Masterplan. Local councillors were not informed about the meetings, local residents actively engaged on the plan were not informed. But the South Quay Masterplan is of national importance as it might involve 12,500 new properties in the area + another 20,000 elsewhere, maybe 8 new schools, a tripling of the population of my ward from 12,500 to 36,000 people, the creation of a new Parliamentary constituency and the ten tallest residential towers in the UK. So how many members of the public turned up to the first meeting? One. I can provide many other examples.

Many residents often say to me that Council officers must be personally corrupt, I disagree but I struggle to understand why they do what they do. Is it because they are acting on Lutfurs instructions? Is it because as the professional experts they do not see the need to include members of the public and their elected representatives in what they are doing? Are they so used to doing their own thing they cannot see the impact of what they do outside of Mullbery Place?

Democracy is also fundamentally based on trust, trust that elections are free and fair. If you lose that trust then you damage democracy, which is one of the cornerstones of our society. I think one of the fundamental issues with TH is that part of the population is passionate about politics, knows the advantages it brings to them and bring a different style of politics. Too many other people could not be bothered to vote (my ward had the lowest turnout in TH at 36%). I cannot be 100% sure what happened in the May elections but there are enough stories, rumours and allegations out there for me to wonder what is real and what is not. I am also aware of activity that was deeply unfair and undemocratic. What I personally observed at the count was disturbing.
Residents have to be re-assured that somebody is investigating all of these stories and rumours but with the exception of the 4 brave individuals going to the High Court no other official institutions seem to be doing so except for Pickles and PWC.

If we had a strong, capable and independent Chief Executive not beholden completely to the Mayor then a degree of trust might be restored but it would still allow the elected Mayor to pursue the policies that he campaigned on.

I have worked in senior positions in both local authorities and in the NHS. I have met people in similar positions who put their life and soul into the work across both types of organisations and I’ve met obnoxious senior officers in both places.

However, the big advantage that councils have over the NHS is — councillors. It doesn’t matter if I agree with their politics or not (I never have) but when you have these non-officers questioning what you do, there is always more chance of issues being illuminated, errors pointed out and greater consultation enforced with that layer of the elected. Councillors can be obnoxious, not understand the issues and be simply self-interested but unelected, unaccountable CEs and Chief Officers are the same – but worse.

The whole point is, Councillor, when you point out the ‘unwillingness or inability of Council officers to engage with residents’ that would most likely be worse with a CE who would answer to nobody but Pickles – s/he would hardly be an ‘independent’ figure.

Council CEs ALWAYS insist they run the council. Officers answer to them, not cllrs. CEs have too much power already – what notice do you think a new CE would take of an opposition councillor, like you? What notice do you think s/he will take of Lab and THF councillors, or the Mayor? There is little point being a councillor if councillors cannot decide council policy. Out of the frying pan and into the fire.

—

CE: But is it democratic?

A CE chosen by a Member Appointment Panel (a council ctte. with proportionality rules) or by the elected Mayor (I don’t know what it is with a Mayor – probably the latter).

OR

A CE appointed by the Secretary of State.

If latter, why not have Pickles appoint ‘strong, independent and capable’ councillors and the mayor too?

One cannot help but think that PWC would seek to interview ex CEOs as part of their investigations into the current state of affairs at LBTH. I’m sure that at least two of them – who have excellent reputations and have done elsewhere – would give them something to think about as to the reasons why LBTH is as it is.

If this position of chief exec has as much influence as you suggest, Andrew, then I presume you would find it problematic for it to be filled with someone picked by Conservative politicians? That party did not pick up many votes in the East End last time I checked.

PWC will have been reporting on findings to the DCLG – irrespective of whether or not PWC have got them all written up as yet.

It would be an own goal on the DCLG’s part to be talking about sanctions and the options open to it if the substance of the findings are such that the only likely outcome is going to be a smart tap on the wrist and an injunction not to be so silly/lazy/etc next time.

It really would be very poor strategy on the part of the DCLG’s Communications Chief to be talking sanctions if none were likely to be taken.

If the briefing had stopped prior to the last paragraph we could still be guessing as to the outcome. The fact the last paragraph is included leads me to conclude that something very significant is likely to happen.

There again, I’ve always maintained that Pickles would never have sent in PWC unless he was pretty sure there was something for them to find. This is the first time he’s exercised his new powers – and in those sort of circumstances you go after copper bottomed certainties.

For what it’s worth my betting is that:
1) the Council will be put on “special measures”
2) a Chief Executive will be appointed who will actually be accountable to Pickles until such time as the Council is taken out of “special measures”

Thanks for the updatge Ted. Just one thing: not quite sure about Pickles picking up the tab – given that legislation about council paying for own audit came into force just before this audit, it looks quite deliberate and pulling back would be an admission of Pickles’ own misjudgement.

We might also reasonably argue that residents, having voted for a leader should take responsibility for the person they voted for (it’s not, after all, the fault of the rest of the country).

That said, Pickles could conceivably use as a get-out the fact that the question mark over the vote itself makes this a special case. In other words, did they really vote him in in the first place?

Ted – Your post has received some very informative and sensible responses which has been refreshing. One thing and I and probably many others would like to know is the legality of a block of elected councillors leaving the council chamber in protest at a question by an opposition member. It was a protest because if they didn’t like the question they could have remained silent. The act of actually walking out turned it into a protest in my opinion. If Peter Golds received legal advice that the question was viable, then he had the right to ask it, and it was an important question. Is this the way it is going to be? Don’t like a question? Lets walk out! A totally disgusting, undemocratic and above all, childish act. At least we all know just what this group think of us – the electorate. They don’t give a flying f***k about us!

I think you’ll find Lutfur was the bad apple kicked out of the Labour bunch. Some other rather bruised apples, driven by greed and an unhealthy desire for power decided to leave the rest of the Labour bunch which now smell like Timotei. Tower Hamlets First on the other hand are rancid and lie in the gutter, but will soon rot and get washed down the sewer by Pickles.

Comments are closed.

Email Subscription

Enter your email address to subscribe to this blog and receive notifications of new posts by email.